People v. Gassman

• Decision Date: 18 April 1946
• Citation: 295 N.Y. 254,66 N.E.2d 705
• Parties: PEOPLE v. GASSMAN et al.
• Court: New York Court of Appeals Court of Appeals

295 N.Y. 254

66 N.E.2d 705

PEOPLE

v.GASSMAN et al.

Court of Appeals of New York.

April 18, 1946.

Appeal from Supreme Court Appellate Division, First Department.

Murray M. Gassman and others were charged by indictment with violating Section 340 of the General Business Law, consolidated Laws, c. 20, and with crimes of conspiracy extortion, attempted extortion and blackmail, and an order of the Court of General Sessions of the county of New York, Goldstein, J., 182 Misc. 878, 45 N.Y.S.2d 709, dismissing, on the minutes of the Grand Jury, the indictment was affirmed by a divided court, 268 App.Div. 377, 51 N.Y.S.2d 173, and the State appeals by permission of the presiding justice of the Appellate Division of the Supreme Court in the First Judicial Department.

Affirmed.

LEWIS, CONWAY and THACHER, JJ., dissenting. Nathaniel L. Goldstein, Atty. Gen. (William F. McNulty, Orrin G. Judd, John P. Powers, Vincent A. Marsicano and Samuel A. Hirshowitz, all of New York City, of counsel), for appellant.

Robert Szold, Irvine J. Shubert and Irving Michael Atkin, all of New York City, for respondents.

DESMOND, Judge.

An indictment against these defendants has been dismissed on the Grand Jury minutes, and the People appeal. The indictment is a long one but we do not have to work our way through its seventy-three counts. The parties agree that the whole indictment must fall unless there was evidence before the Grand Jury to support this allegation contained in one of the counts: ‘That the members of said alleged union are persons independently engaged in the business on their own account, duly licensed as such by the City of New York, having no employers, soliciting their own customers and independently engaging in the business of soliciting laundry trade for profit, and that none of the so-called laundry agents who became and are members of said alleged union are employees or have employers, but are engaged in business for themselves and that the said alleged union was not and is not a bona-fide labor union.’

The reference is to section 340 of the General Business Law. Section 340 is part of the Donnelly Act, now article 22 of the General Business Law. Passed originally in 1899 (ch. 690), the act declared illegal and penalized every contract or combination whereby a monopoly in this State of any commodity in common use is or may be created or maintained or whereby competition in the supply or price of such commodity may be restrained or whereby, in order to create or maintain such a monopoly, the free pursuit of any business, trade or occupation is or may be restricted or prevented. The Donnelly Act is ‘little more than a codification of the common law upon the subject.’ Matter of Davies, 168 N.Y. 89, 101, 61 N.E. 118, 120,56 L.R.A 855. Under the common law it had been held that a combination of workingmen to obtain increased compensation for themselves was a criminal conspiracy ‘injurious to trade or commerce.’ People v. Fisher, 14 Wend. 9, 15, 28 Am.Dec. 501. In 1933, the Legislature added the word ‘service’ to the first paragraph of section 340, apparently because of court decisions that the act prior to that amendment had no application to price Fixing on ‘services'. In the same year there was put into the act a statement that it should not apply to certain co-operative associations ‘nor to bona fide labor unions'. Still later, in 1935, there was added, as subdivision 3 of section 340, these significant words, taken from the Federal Clayton Act, U. S. Code, tit. 15, s 17, 15 U.S.C.A. s 17: ‘the labor of human beings shall not be deemed or held to be a commodity or article of commerce as such terms are used in this section’ and the further pronouncement that ‘nothing herein contained shall be deemed to prohibit or restrict the right of workingmen to combine in unions, organizations and associations, not organized for the purpose of profit.’ And not only the Legislature but the People of this State have declared in unmistakable terms that our antimonopoly laws are not to be used against workers seeking to better their lot. Article I, section 17, of the Constitution, adopted by popular vote in 1938, declares: ‘Labor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed.’ One would look far for a flatter statement than that.

Our question is thus a simple one. If defendants did no more than organize and operate a ‘bona fide labor union’ or an ‘association’ of ‘workingmen’, and through it further the aims lawful for such a union or association, then the Donnelly Act, by precise exclusion, has nothing at all to do with their acts (see discussion of the Clayton Act in Allen Bradley Co. v. Local Union No. 3, International Brotherhood of Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533). If that be the situation in this case, defendants could not validly be indicted for a violation of the act and this indictment had to be dismissed. People v. Glen, 173 N.Y. 395, 66 N.E. 12; Code Crim.Proc. s 258.

Although some fifty witnesses, including most of the defendants, testified before the Grand Jury, the basic facts are few and undisputed. Until about twenty years ago the laundry companies in New York City had their bundles picked up from, and delivered back to, their customers by drivers employed by the companies. Then some of the laundry companies conceived the idea of changing the status of these drivers so as to avoid the payment of certain insurance premiums and other charges. Under the new plan the driver had to own his own truck and ceased to be an employee. These men, now called ‘agents', became in time more and more independent and began to shop around among the various laundry companies for the best terms. Some of them combined together to operate their own laundries. Others, singly or in groups, conducted stores where customers brought laundry and called for it when finished. Some of these storekeepers carried the bundles to and from the laundries; in other cases the laundry company picked up the bundles at the store. A thousand or more of these drivers, agents and storekeepers were organized by defendants into Local 324 of the Amalgamated Clothing Workers of America. The so-called ‘INSIDE WORKERS' IN THE LAUNDRIES THAT IS, the employees who do the actual laundry work are members of other locals of the parent union, so that practically all the domestic laundry workers in New York City are organized under the Amalgamated Clothing Workers of America. There are closed shop agreements between the laundry companies and the various locals, by the terms of which the laundry companies are forbidden to do business with drivers, agents or storekeepers who are not union members. Driver-agents and storekeeper-agents are not permitted to shift from one laundry to another except upon consents, procured from committees set up under the closed shop agreements. All but three of the defendantsare officers of Local 324 the other three are connected with the parent organization, the Amalgamated Clothing Workers of America. All, except the three last mentioned are, or have been, laundry truck or wagon drivers.

The members of Local 324, though no longer employees, still drive the vehicles, pick up and mark the bundles, carry them between customers and laundry companies, collect the charges and account to the companies for those collections, receiving as their compensation the difference between the amounts charged by the laundry and the amounts paid by the householders. Their physical activities and their economic function are the same as before. True, they have some of the marks or qualities of independent contractors, such as a measure of independence and some small investment of capital. But in common speech and common sense, they are still ‘workingmen’ just as are window cleaners or furnacemen who go from house to house and are not employees of any one. We find no controlling definitions of ‘labor union’ or ‘workingmen’ but we are here dealing not with niceties of language but with a broad policy, strongly expressed, of exempting workers from the anti-monopoly statutes. The policy of protecting and encouraging the right of workers to organize and bargain is as well settled in this State as any policy could be. It finds further expression in the anti-injunction statute, Civil Practice Act, s 876-a, passed in 1935, and in our State Labor Relations Act (Labor Law, art. 20. Consol.Laws, c. 31), which was enacted in 1937. For sufficient reasons the Legislature limited the coverage of those two statutes to ‘employees'. The 1935 amendment of subdivision 3 of section 340 of the General Business Law, however, used the broader word ‘workingmen’ and that amendment, as well as the 1939 addition to the Constitution, refers to ‘labor of human beings'. The word ‘worker’ has a wider range than the word ‘employee’, and ‘worker’ is the genus of which ‘employee’ is a species. Restatement of Torts, Vol. 4, par. 776. ‘Workingmen’ means people who perform certain tasks, rather than people in certain contractual relationships. The members of...